Fiscal and Monetary Policy Essay

Module 06 Content

1. You are a junior executive of a new cellular phone carrier called Technologies of the Future (TOF) that competes in the same market as Verizon Wireless, AT&T, and T-Mobile. You are asked to write a professional document that discusses the concepts below.

   • Define the goals and objectives of the Federal Reserve.
   • Identify the four monetary policy tools used by the United States and explain which monetary policy tool would influence the sale of smartphones in the U.S.
   • Discuss the difference between expansionary monetary policy and contractionary monetary policy.
   • Explain how expansionary monetary policy would lead to an increase in the sale of smartphones.
   • Explain the difference between the M1 and M2 money supply.
   • Identify whether an increase in the M1 or M2 money supply would lead to an increase in the sale of smartphones.
   • Explain how higher interest rates and inflation would affect the sale of smartphones in the United States.
   • Describe the two fiscal policy tools used by the federal government.
   • Discuss the difference between expansionary fiscal policy and contractionary policy.
   • Which fiscal policy tool has the greatest influence over the sale of smartphones in the United States and why?

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